FTC Issues Final Rule Banning Many Employment Non-Compete Clauses
April 30, 2024 | Karl R. Ulrich
On April 23, 2024, the Federal Trade Commission (FTC) enacted a transformative rule that invalidates many existing non-compete agreements, marking a significant shift in employment law. This final rule, which the FTC argues addresses “unfair competition” under the Federal Trade Commission Act of 1914, will take effect 120 days after its publication in the Federal Register. The rule not only prohibits new non-compete clauses post its effective date but also nullifies existing agreements, except for those involving senior executives defined by specific earnings and roles. This decisive action by the FTC, anticipated since its initial proposal in January 2023, modifies a long-standing business practice and is expected to face legal challenges from various stakeholders.
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